REIT - Net Lease REITs: Back To Business

• It's back to "business as usual" for net lease REITs, which endured punishing declines early in the pandemic before ultimately exhibiting impressive resilience in the face of stiff macroeconomic headwinds.
• Acquisition-fueled growth - the "bread and butter" of the sector - has kicked back into gear, underscored by Realty Income's massive acquisition of VEREIT, as the "animal spirits" come alive.
• Despite their heavy retail and restaurant exposure, net lease REITs - with some exceptions - fared far better than their retail REIT peers with rent collection "normalizing" by late 2020.
• Earnings results and commentary were refreshingly "normal" as these REITs are again on the offensive. Net lease REITs - which are 7% of the Real Estate Index - accounted for 35% of total REIT net acquisitions.
• More "corporate bond-like" than any other REIT sector, rising interest rates and inflation threaten to spoil the party. Potential tax code changes to 1031 exchange rules introduce long-term uncertainty but could catalyze a near-term surge in acquisitions.

For further details see: